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Fall Sales Flat for 3 Years

For more than 2 years, MB's RE market has been puffing along with a sense of relief and a return to normalcy. No more irrational exuberance, but a steady, fairly stable feeling.

One way to see that is to look at the sales pace for the Fall months. We've defined that period as the 3 months beginning Sept. 1.

As our new charts here show, the number of SFR sales has been almost exactly equal for Fall 2009-2011.

It was Q3 2009 that largely marked the end of the local RE decline, so these data should not be a huge surprise. This is one case where boring is probably welcome.

Sales of SFRs in all of MB (first chart; click to enlarge) were at 68 this year in the period Sept. 1-Dec. 1, essentially equal to the 69 from 2009 and 71 last year. (Data in this story come from the MLS; with tax-record data we'd see somewhat more.)

It's a similar story west of the highway: 49 SFR sales this Fall, 51 last year, 47 in 2009.

The big dips in both charts are for 2007 and, especially, 2008. It's not hard to imagine the problem in 2008 – the financial world melted down around then. The drive to buy was diminished and people were jumping out of contracts at the same time. Sales were down about 25% across MB and west of Sepulveda.

The 2007 dip also makes sense – news of the housing market's drop nationally and regionally was everywhere, and the refrain that "MB is different" was coming into question.

We pushed all the way back to the late bubble years, 2005-06, to see what a crazy peak-year Fall would look like. You see 92 sales in all of MB in the 3 months of Fall in 2005, and 81 in '06. Right now we're down 15-25% from that pace.

We'll deal with median prices after Q4 wraps up, in a post early in the new year. For a refresher, though, see our YTD story on medians from October, current through Q3 – prices then were down a bit from last year. (See "First 3Q of '11: More Sales, Median Surprise.")

Thinking about demand and sales pace, though, you do get the sense, working on the front lines, that we'd have more sales this year if only we had more quality inventory. There is demand that is not being met. How much? We'll see how that resolves next year.